Econ Test 1

Front 1

5 simplifying assumptions when examining production possibilites

Back 1

1. all available resources will be used fully
2. all abailable resources will be used efficiently
3. quantity and quality of resources not changing
4. technology not changing
5. can produce only two goods

Front 2

3 basic economic questions

Back 2

1. what to produce
2. how to produce
3. to whom to produce it

Front 3

5 factors that affect demand

Back 3

1. consumer income +
2. price of related goods (sub +, comp -)
3. expected prices +
4. taste and preferences +
5. number of consumers +

Front 4

6 factors that affect supply

Back 4

1. cost of resources and production -
2. expected price -
3. technology and productivity +
4. taxes -, subsidies +
5. number of suppliers
6. weather, natural disasters, war

Front 5

5 factors that cause demand curves to shift

Back 5

1. change in the number of consumers
2. change in the tastes of consumers
3. change in consumer incomes
4. change in the price of compliments and substitutes
5. change in consumer expectations of future price

Front 6

5 market failures

Back 6

*1. public goods and services
*2. spillovers
*3. market power/lack of competition
*4. economic instability
5. imperfect information

Front 7

3 distinguishing characteristics of the farm sector

Back 7

1. inelasticity of farm goods
2. immobility of resources
3. extensive technological change

Front 8

4 governmental policies toward agriculture

Back 8

1. price supports
2. programs to restrict supply
3. target prices and deficiency payments
4. efforts to increase demand

Front 9

5 ways to deal with a surplus

Back 9

1. store
2. sell overseas
3. give as aid overseas
4. give as aid domestically
5. destroy

Front 10

3 common factors of price supports, supply restriction, and target prices

Back 10

1. redistribute income from taxpayers to farmers
2. benefit larger farms (reward output by unit)
3. target the supply side of the market

Front 11

2 advantages of the federal government controlling environmental policy

Back 11

1. larger taxbase
2. easier to implement 1 national law than 50 different laws

Front 12

1 disadvantage of the federal government controlling environmental policy

Back 12

2. insensitive to local needs

Front 13

3 methods to regulate pollution

Back 13

1. standards
2. pollution fees
3. pollution permits

Front 14

2x2 classifications of standards

Back 14

1. performance
2. design

1. uniform
2. specific

Front 15

3 steps to implementing standards

Back 15

1. licensing or certification
2. monitoring
3. feild surveillance

Front 16

2 types of pollution fees

Back 16

1. effluent fee (water)
2. emission fee (air)

Front 17

2 factors that strain the environment (dealing with overpopulation)

Back 17

1. more people than available resources
2. too much output and consumption of goods

Front 18

4 types of market structures

Back 18

1. pure competition
2. monopolistic competition
3. oligopoly
4. pure monopoly

Front 19

4 characteristics of pure competition

Back 19

1. large number of sellers and buyers
2. sells a standardized product
3. no barriers to entry or exit
4. equal access to information for and by sellers and buyers

Front 20

5 barriers to entry

Back 20

1. difficulty in raising capital (start-up cost)
2. economies of scale
3. ownership to a unique resource
4. government restrictions
5. behavior of existing companies

Front 21

4 legal or government restrictions

Back 21

1. patents, copyrights, trademarks
2. regulation
3. tariffs on imported goods
4. licenses, franchises, and CCN's

Front 22

2 behaviors of existing companies

Back 22

1. limit pricing
2. predatory pricing

Front 23

3 weaknesses of concentration ratios

Back 23

1. only focuses on industry, not whole market
2. doesn't consider import competition
3. doesn't take regional aspects into account

Front 24

3 adverse affects of market power

Back 24

1. collusion
2. economic inefficiency
3. price discrimination

Front 25

4 forces that limit market power

Back 25

1. antitrust
2. import competion
3. technological change
4. regulation and deregulation

Front 26

6 factors that cause supply curves to shift

Back 26

1. change in the number of sellers
2. change in the price of resources
3. change in the technology used to produce the product
4. change in price of other products produced with the same resources
5. change in government taxes or subsidies
5. change in the sellers' expectations of future price